The percentage of borrowers selecting fixed-rate deals rose to the highest level in over three years in August, according to the Mortgage Advice Bureau.
Its latest mortgage index shows 83.1 per cent of borrowers selected fixed-rate deals for purchase applications in August, up 3.8 per cent rise from July.
This is the most popular fixed rates have been since June 2009 when the figure stood at 89.6 per cent.
Mortgage Advice Bureau head of lending Brian Murphy says: “August saw borrowers increasingly opting for fixed rates with 83.1 per cent of house purchasers and 84 per cent of remortgage customers electing to fix.
“These are both the highest proportions of fixed rate take up since July 2009, suggesting that borrowers are seeing real value in the price and security that fixed rates currently offer.”
The biggest decline in mortgage rates came from five-year fixed rates which dropped by an average of 0.14 per cent to 4.87 per cent in August. The average three-year fixed rate remained unchanged at 5.02 per cent.
Purchase activity was 14 per cent higher in August than at the start of the year, while the average deposit size was 17 per cent higher than for January. Average deposits dropped to £65,518 in August from £66,832 in July but remain stubbornly higher than the £56,977 figure recorded for January.
The Bureau reports that the average LTV in remortgage cases climbed from 56.7 per cent in July to 58.7 per cent in August. The average rate at the start of the year was 57.7 per cent. The size of the average remortgage loan rose from £150,389 in July to £153,574, in August.